Many economic forces are colliding for Alaskans - increased fuel, food and housing costs. Like other employers, the State of Alaska is aware of the pressures on its employees and has begun implementing change.

State workers in the two largest employee unions and those not covered by a union agreement will see wage increases on their checks beginning this week. Around the end of June, these employees will see a check for this salary increase retroactive to July 1, 2007. The previous contracts expired June 30, 2007. Another increase will occur July 1 of this year when a three percent increase is added to these salaries.

The State must be a competitive employer. We are eight percent of the total statewide work force. Local government accounts for 13 percent and the federal government five percent.

As the Governor's Executive Working Group created under Administrative Order No. 237 continues our work, we'll be defining where the State should be relative to other employers and drafting a plan to get us there. Salary is one part of compensation. In addition to wages, the State currently pays nearly $900 per month per employee for health care, and contributes toward pensions - including the social security replacement Supplemental Benefits System. Any comparisons with other employers must recognize all of the State's contributions.

Negotiating fair, sustainable labor contracts is one element of addressing recruitment and retention. Another is really recruiting - not just advertising the jobs to other State employees, but attracting qualified applicants from within and outside State service.

By passage and signing of HB 417, Governor Palin and the Legislature have helped us remove impediments to merit pay increases. Some employees have had to wait up to seven years for a merit increase, and those who had contributed the most time to the State were capped at the end of their careers with no additional increases available. HB 417 has removed those barriers.

While the private sector can be more mobile and flexible with salaries, incentives and monetary rewards, and conversely in a downturn more able to lay off employees, State government must be accountable to the customers and shareholders it serves - the people of Alaska. While we are concerned about constraining the growth and reach of State government, high turnover and poor knowledge transfer within government cost businesses and Alaskans in lost time and productivity.

Within the next five years 27 percent of our work force will be eligible to retire as Baby Boomers reach retirement age. We are not unique in this regard. Information provided to the Working Group shows this to be a national problem.

The Working Group will begin meeting again in the near future to get an update on implementation of short-term solutions outlined in the report to Governor Palin. The group will assess the viability of the remaining short-term solutions and plan implementation of longer term actions to assure knowledge transfer and efficiencies in delivery of services. This will be necessary due to fewer available workers to fill the growing number of vacant positions. We remain committed to finding solutions to these challenges and focusing State efforts on the priorities of the Palin Administration.

Annette Kreitzer is commissioner of the Department of Administration and a resident of Juneau.